Citadel raises capital by issuing preferred.

GLENDALE, Calif. -- In an effort to raise capital, Citadel Holding Corp. said it has restructured its balance sheet to replace $5.25 million of short-term debt with equity.

Citadel said it issued 1.3 million shares of newly authorized 3% cumulative voting convertible preferred stock.

The shares were issued to Craig Corp. at a price of $3.95 per share. The preferred shares represent 16.6% of Citadel's outstanding voting securities. Craig also holds 10% of Citadel's outstanding common stock, representing about 8.3% of all voting securities.

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